This post is using several definitions, so let me start with clarifying them.
Complex Vs. Complexity – both of them are built from many components, and it takes time to understand them. The complex systems though are composed of parts that interact one with each other. Due to the interaction property, complex systems are tough to predict, while systems with complexity are straightforward to predict.
Ashby’s law or The law of requisite variety: If a system is to be stable, the number of states of its control mechanism must be greater than or equal to the number of states in the system being controlled.
Variety: The total number of possible states of a system, or elements of a system.
So, how all of those terms are coming together? People are grouping together for one main reason – emergent properties. It is easier and more agile to work by yourself, but one individual is limited of what he can achieve mainly because more people bring more emergent properties that make the group better than the individuals that are part of it.
A system (a group of people in our case, or organization) needs a certain level of variety to achieve their common purpose successfully. This variety needs to be equal to the system they are trying to impact (not realistic) or more than their competitors in that field (more realistic). As an organization has more states or elements, the complexity of the organization grows.
Complexity exists and always growing outside of any organization. Competitors, technology, legislation, global political trends, all of those increase the complexity of any organization environment. As I mentioned before this ongoing increase in the environment complexity increase complexity inside the company. Yes, Ashby’s law.
So we have emergent properties, internal complexity, and external complexity. To reduce complexity in any environment (including organizations) the fourth element comes into place: Resources. Complexity increases chaos and to minimize chaos and increase order any system needs to use energy. Energy required resources.
As the complexity increased (and it will increase exponentially) more resources are needed. But, resources will never grow in the same exponential curve as complexity. As we are adding more resources, we are increasing even more complexity. Therefore complexity will always grow exponentially related to available resources. Eventually, an organization won’t have enough resources to deal with complexity. At that point, complexity will take this organization apart.
In order to prevent (or actually slow down) these vicious cycles organizations need to find a way how to reduce complexity and/or increase/add emergent properties. How? this is an excellent topic for the next post on this topic